With the sale of recreational marijuana set for legalization in Montana next year, Missoula County will consider asking voters whether to tax the retail sale of pot and its related products at 3%.
Commissioners on Thursday opened the public comment period on the proposal which, if approved, would result in a special local election. The revenue from the 3% excise tax is estimated at around $716,000 annually and could go to a number of uses, from reducing property taxes or other needs to be determined.
“We were automatically opted in where recreational marijuana will be allowed to be sold,” said county CAO Chris Lounsbury. “It includes a local option 3% tax, which may be charged against all or limited forms of marijuana. That 3% tax becomes effective 90 days after the election.”
When the bill legalizing recreational marijuana was signed into law, it permitted counties where a majority of voters approved legalization to consider the 3% local excise tax.
The tax would apply to all existing marijuana dispensaries within the county. According to Missoula County, 48 local dispensaries are currently registered with the Montana Department of Health and Human Services.
While the county hasn’t officially considered whether to place the excise tax on the ballot, the revenue uses could be far reaching.
Based on current projections compiled by the Bureau of Business and Economic Research at the University of Montana, a 3% excise tax would generate around $716,100 annually in Missoula County.
The county would retain 50% of the revenue and 45% would go to the City of Missoula. The remaining 5% would go to the state for administrative purposes.
But the state will impose its own tax, including 20% on recreational marijuana and 4% on medical marijuana sales. However, that revenue doesn’t directly benefit the county in which the sales occur.
“The marijuana tax would arrest or slow property tax growth a little bit,” Commissioner Josh Slotnick told the Missoula Current last week. “We’re a bit reticent to say it will go here or there. We don’t know how much money is going to be raised. It’s all based upon projections.”
For now, commissioners are withholding further comment until the public hearing process closes on July 15. At that point, they’ll decide whether to place the local option tax on the ballot for a special election, where voters will ultimately make the final decision.
Public comment has been sparse thus far though on Thursday, one individual who said he formerly worked in the industry urged commissioners to not place the option on the ballot. He said taxation would keep the black market alive.
“I’ve worked in that industry for years and stepped away,” he said. “I need to be able to speak my mind and not put my employer in danger. There’s a lot of problems with this and it’s a short-sighted move to keep adding more taxes.”